Follow SouthernDCBlogs on Twitter

Monday, January 16, 2012

Philippine Economy Rising

BANKING giant Hongkong and Shanghai Bank (HSBC) announced recently that the Philippines can be one of the world’s top economies by 2050.It is encouraging that this independent and credible financial organization sees the enormous potential our country has for economic growth, and that if this potential is nurtured, the outcomes will be concrete and tangible and will provide benefits for the nation and its people.In the HSBC report, the Philippine economy is forecast to rise 27 places upward to 16th rank less than 40 years from now.The Philippines was also marked as one of 26 “fast-growth” countries expected to register “an average expansion of more than 5 percent per year.”Despite a “very low level of development,” the report says the Philippines is among those countries that has made “great progress in improving fundamentals. As they open themselves to the technology available elsewhere, they should enjoy many years of ‘copy-and-paste’ growth ahead.”The Philippines was noted as being one of the “truly remarkable hot spots in Asia…. The star performer, however, is the Philippines, where the combination of strong fundamentals and powerful demographics gives rise to an average growth rate of 7 percent for the coming 40 years.”Noted as contributing to the country’s progress are the “improvements in its economic infrastructure,” with the “fast-growing population…expected to increase the country’s labor force, which likewise benefits from the quantity and quality of education.”HSBC projected the Philippines’s average gross domestic product growth at 8.4 percent from 2010 to 2020, 7.3 percent from 2020 to 2030, and 5.8 percent from 2040 to 2050.The report stated further that China is expected to become the No.1 economy, followed by the United States, India, Japan and Germany in the top five, in that order. Many smaller economies will move up, such as Peru (to improve by 20 places), Egypt (+15), Nigeria (+9), Malaysia (+17) and the Ukraine (+19). Many European countries may decline, especially those in Northern Europe, because of a smaller work force and the rise of developing nations—Denmark (-29), Norway (-22), Sweden (-20), and Finland (-19).Among the factors that contribute to long-term economic growth are demographics—the size of the working population—and the opportunities for each individual to be more productive.In order to create a milieu conducive to promoting productivity, there must be the following significant factors: opportunities for education, democratic governments, and strong rule of law.Factors that could derail progress are war, energy-consumption constraints, climate change, and barriers to population movement across borders.The report comes with a caveat: “We openly admit that behind these projections we assume governments build on their recent progress and remain solely focused on increasing the living standards for their populations….Of course, this maybe an overly glossy way of viewing the world.”The Philippines under President Aquino is already putting those measures for growth in place. Economic growth showed a strong uptick in 2011, when the Philippine Stock Exchange closed with a 4.1-percent gain. This made it Asia’s best-performing economy for the year.In another report, to create a climate conducive to more growth, the Association of Southeast Asian Nations is working toward “a unified trading bloc with free-flow capital by 2015.” Electronic-trading links will be set up in Asian countries to “allow more investments and raise liquidity,” starting in 2012 in Malaysia, Thailand and Singapore, followed later by the Philippines.In addition, the Aquino administration has taken larger steps toward fighting read more